Ask The Experts - Surgery Rent Value

Answer

Whilst it is true to say that overall commercial property has probably fallen in rental value, the property market is both very complex and imperfect.  Rents will vary for different types of property, different locations and due to different ages/quality. Thus just because local retail or office values have fallen, does not mean that surgery rents have followed.  Indeed, it is my experience that they have been much more resilient and that they have continued to rise.

Members of the Primary Care Premises Forum, including specialist valuers such as Aitchison Raffety, Lambert Smith Hampton, GVA Grimley and Stiles Harold Williams have pooled all the results of three year rent reviews for surgery/medical premises in 2009 and 2010.  In 2009, from the analysis of 71 rent reviews, an average increase of 10.82% is shown.  Information for 2010 is still being input but, initially, it is showing a smaller increase in the region of 10%.  These figures are not surprising as, unlike commercial property, the demand for good quality medical premises has continued to grow as, without such premises, GPs would not be able to aspire to the additional services and cost savings from less referrals envisaged by the Health & Social Care Bill.  The story of course could be different for poor converted premises that are getting close to the end of their life as a surgery, where one may well see rental reductions.  Georgraphically, the statistics for 2009 would indicate London having the highest increases with the south-west the lowest and the remainder of England fairly even.  In 2010, the increases which as noted appear to be lower also appear to be evening out across the country.